Bloomberg – Iron ore imports by China surged to a record above 1 billion tonnes last year as unexpectedly strong steel production and lower local mine output combined to fire up demand in the world’s top buyer for cargoes from Australia and Brazil, supporting a rebound in prices.
Asia’s top economy imported 1.024 billion tonnes in 2016, up 7.5 per cent from a year earlier, according to customs data issued on Friday: that’s about 32 tonnes a second, according to Bloomberg calculations. Purchases last month totalled about 89 million tonnes, compared with 96.3 million tonnes a year earlier.
Iron ore surged more than 80 per cent last year as China added stimulus to sustain economic growth, bolstering steel production, soaking up rising low-cost mine supply and shredding bears’ forecasts.
The outlook depends on the country’s ability to absorb even greater volumes, with Australia’s government among those seeing little scope for gains, while others see the potential for a further increase. Seaborne supply may expand again this year as Brazil’s Vale starts up production at its giant S11D project.
Imports should “continue to rise through 2017”, Justin Smirk, a senior economist at Westpac Banking, said in an email before the data. “It is all about supply, the supply of ore in the seaborne trade from both Australia and Brazil, as well as some of the smaller producers, continues to grow and as such, will continue to enter the Chinese markets.”
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